SDV Insights

Water damage, while one of the leading causes of loss under a property policy, often results in some of the most complex claims due to the intersection of exclusions, sublimits, and complex wording within the policy. One particularly difficult issue is whether water damage caused by a storm surge is covered by the flood sublimit, or under the general policy or water limit.

What do you do when less is more? In many loss scenarios, triggering coverage under multiple policies can be a critical and effective strategy. However, doing so has the potential to complicate the insurance recovery proceedings immensely, and possibly even undermine those overall goals. The relation of "other insurance" clauses, allocation schemes, and the practical impacts of interacting with multiple insurers can all leave the insured with some difficult questions.

With a death toll of more than 2,700 and more than 80,000 infected, Policyholders' measures and governmental efforts to contain the spread of the Coronavirus has interrupted business and disrupted supply chains worldwide. Policyholders fearing the threat of the Coronavirus to their normal business operations should review if their first-party insurance would respond to the Coronavirus threat.

Construction is an inherently risky business, fraught with the potential for human error. Despite best efforts to ensure safety, accidents involving construction workers are common, with consequences ranging from your run-of-the-mill trip and fall to much more serious and debilitating injuries.

Recently, a New York Appellate Division agreed with a trial court that failure to appear for multiple depositions does not constitute non-cooperation under the insurance policy. Applying the Thrasher test, the New York Appellate Division for the Second Department in Foddrell v. Utica First Insurance Co., No. 2017-04573, 2019 WL 6884967 (N.Y. App. Div. Dec. 18, 2019) found that this conduct did not rise to the level of "willful and avowed obstruction."

In Aggreko, LLC v. Chartis Specialty Ins. Co.,the Fifth Circuit affirmed a decision by the Texas District Court and held that a Covenant Not to Execute constituted a "settlement" sufficient to exhaust policy limits and terminate a primary insurer's duty to defend.

In the 2019 edition of SDV's Top Ten Insurance Cases, we probe wiretapping claims under an armed security services policy, delicately sniff out E&O coverage for a company using cow manure to create electricity, scour the earth for coverage for crumbling foundation claims, and inspect D&O policies for government investigation coverage. In addition, we preview some important and exciting decisions due in 2020.

Maryland's highest court recently heard arguments regarding the proper method of allocation of the covered damages from a slowly progressing asbestos injury amongst insurance policies in place over a period of years. Rossello v. Zurich American Insurance Company, Case No. 2436 (Md. 2019). The court may also be forced to determine what the proper trigger of coverage is for latent bodily injury claims, although the plaintiff has not framed the issue in that manner.

The Insurance Services Office, Inc. (ISO) issued several new and revised endorsements for use with Commercial General Liability (CGL) coverage forms, which became effective December 1, 2019, in most jurisdictions. The new ISO endorsements include several notable changes that Policyholders should be aware of, including revisions to existing Additional Insured (AI), Primary and Noncontributory, and Waiver of Subrogation endorsements, as well as a number of new AI and other endorsement forms.

Formal investigations into the activities of corporations and their directors and officers remain increasingly hot topics in the news. While many of these investigations make headlines, whether or not a company might have coverage for fees incurred defending these investigations is seldom mentioned. Depending on the policy language, Director's and Officer's Liability ("D&O") may be a crucial risk management tool for companies faced with governmental investigations.